But take a step back. Why was this clause included in the first place? Well, according to the CBO, it raises $19bn in the 10-year budget window of the ACA. How does it raise $19bn? It's not a new tax, it's not a spending cut, all it does is require more paperwork. Well, it turns out that tax evasion is rampant in businesses (shocking, I know), and requiring more paperwork means that the IRS will be able to collect the taxes that these businesses already owe. It's not that there's a new tax that raises $19bn over 10 years, it's that businesses are currently breaking the law by evading taxes to the tune of something north of $1.9bn/year. So save some of your sympathy. And pay your damn taxes. It's the law, after all.
Monday, January 24, 2011
One of the more universally hated clauses in the ACA is the "1099 clause." Basically, it requires small businesses to do a whole lot more paperwork when they make purchases. That's bad, because we all love small businesses and they are the engines of job growth, etc. Fine, most people agree that in its current form, the clause is overly burdensome to small businesses.